Sam Miller’s Loan Data from Prosper Exploration
This data set contains 113,937 loans with 81 variables on each loan, including loan amount, borrower rate (or interest rate), current loan status, borrower income, borrower employment status, borrower credit history, and the latest payment information.
I truly wanted to understand in my analysis which party benefits most in which situtations from prosper loans: Prosper, Investor or Borrower? How easy is it for an investor to truly loose all there money on a prosper loan? What loans are the most likely to make an investor are large return? I also want to understand how specific credit ratings and score relate to borrowers characteristics. I hope I can provide you with some interesting insights into the world of prosper loans by the end of this analysis.
Analysis and Exploration of the Data
Univariate Plots
Size of Dataset and Data Types
## 'data.frame': 113937 obs. of 81 variables:
## $ ListingKey : Factor w/ 113066 levels "00003546482094282EF90E5",..: 7180 7193 6647 6669 6686 6689 6699 6706 6687 6687 ...
## $ ListingNumber : int 193129 1209647 81716 658116 909464 1074836 750899 768193 1023355 1023355 ...
## $ ListingCreationDate : Factor w/ 113064 levels "2005-11-09 20:44:28.847000000",..: 14184 111894 6429 64760 85967 100310 72556 74019 97834 97834 ...
## $ CreditGrade : Factor w/ 8 levels "A","AA","B","C",..: 4 NA 7 NA NA NA NA NA NA NA ...
## $ Term : int 36 36 36 36 36 60 36 36 36 36 ...
## $ LoanStatus : Factor w/ 12 levels "Cancelled","Chargedoff",..: 3 4 3 4 4 4 4 4 4 4 ...
## $ ClosedDate : Factor w/ 2802 levels "2005-11-25 00:00:00",..: 1137 NA 1262 NA NA NA NA NA NA NA ...
## $ BorrowerAPR : num 0.165 0.12 0.283 0.125 0.246 ...
## $ BorrowerRate : num 0.158 0.092 0.275 0.0974 0.2085 ...
## $ LenderYield : num 0.138 0.082 0.24 0.0874 0.1985 ...
## $ EstimatedEffectiveYield : num NA 0.0796 NA 0.0849 0.1832 ...
## $ EstimatedLoss : num NA 0.0249 NA 0.0249 0.0925 ...
## $ EstimatedReturn : num NA 0.0547 NA 0.06 0.0907 ...
## $ ProsperRating.numeric : int NA 6 NA 6 3 5 2 4 7 7 ...
## $ ProsperRating.Alpha : Factor w/ 7 levels "A","AA","B","C",..: NA 1 NA 1 5 3 6 4 2 2 ...
## $ ProsperScore : num NA 7 NA 9 4 10 2 4 9 11 ...
## $ ListingCategory.numeric : int 0 2 0 16 2 1 1 2 7 7 ...
## $ BorrowerState : Factor w/ 51 levels "AK","AL","AR",..: 6 6 11 11 24 33 17 5 15 15 ...
## $ Occupation : Factor w/ 67 levels "Accountant/CPA",..: 36 42 36 51 20 42 49 28 23 23 ...
## $ EmploymentStatus : Factor w/ 8 levels "Employed","Full-time",..: 8 1 3 1 1 1 1 1 1 1 ...
## $ EmploymentStatusDuration : int 2 44 NA 113 44 82 172 103 269 269 ...
## $ IsBorrowerHomeowner : Factor w/ 2 levels "False","True": 2 1 1 2 2 2 1 1 2 2 ...
## $ CurrentlyInGroup : Factor w/ 2 levels "False","True": 2 1 2 1 1 1 1 1 1 1 ...
## $ GroupKey : Factor w/ 706 levels "00343376901312423168731",..: NA NA 334 NA NA NA NA NA NA NA ...
## $ DateCreditPulled : Factor w/ 112992 levels "2005-11-09 00:30:04.487000000",..: 14347 111883 6446 64724 85857 100382 72500 73937 97888 97888 ...
## $ CreditScoreRangeLower : int 640 680 480 800 680 740 680 700 820 820 ...
## $ CreditScoreRangeUpper : int 659 699 499 819 699 759 699 719 839 839 ...
## $ FirstRecordedCreditLine : Factor w/ 11585 levels "1947-08-24 00:00:00",..: 8638 6616 8926 2246 9497 496 8264 7684 5542 5542 ...
## $ CurrentCreditLines : int 5 14 NA 5 19 21 10 6 17 17 ...
## $ OpenCreditLines : int 4 14 NA 5 19 17 7 6 16 16 ...
## $ TotalCreditLinespast7years : int 12 29 3 29 49 49 20 10 32 32 ...
## $ OpenRevolvingAccounts : int 1 13 0 7 6 13 6 5 12 12 ...
## $ OpenRevolvingMonthlyPayment : num 24 389 0 115 220 1410 214 101 219 219 ...
## $ InquiriesLast6Months : int 3 3 0 0 1 0 0 3 1 1 ...
## $ TotalInquiries : num 3 5 1 1 9 2 0 16 6 6 ...
## $ CurrentDelinquencies : int 2 0 1 4 0 0 0 0 0 0 ...
## $ AmountDelinquent : num 472 0 NA 10056 0 ...
## $ DelinquenciesLast7Years : int 4 0 0 14 0 0 0 0 0 0 ...
## $ PublicRecordsLast10Years : int 0 1 0 0 0 0 0 1 0 0 ...
## $ PublicRecordsLast12Months : int 0 0 NA 0 0 0 0 0 0 0 ...
## $ RevolvingCreditBalance : num 0 3989 NA 1444 6193 ...
## $ BankcardUtilization : num 0 0.21 NA 0.04 0.81 0.39 0.72 0.13 0.11 0.11 ...
## $ AvailableBankcardCredit : num 1500 10266 NA 30754 695 ...
## $ TotalTrades : num 11 29 NA 26 39 47 16 10 29 29 ...
## $ TradesNeverDelinquent.percentage : num 0.81 1 NA 0.76 0.95 1 0.68 0.8 1 1 ...
## $ TradesOpenedLast6Months : num 0 2 NA 0 2 0 0 0 1 1 ...
## $ DebtToIncomeRatio : num 0.17 0.18 0.06 0.15 0.26 0.36 0.27 0.24 0.25 0.25 ...
## $ IncomeRange : Factor w/ 8 levels "$0","$1-24,999",..: 4 5 7 4 3 3 4 4 4 4 ...
## $ IncomeVerifiable : Factor w/ 2 levels "False","True": 2 2 2 2 2 2 2 2 2 2 ...
## $ StatedMonthlyIncome : num 3083 6125 2083 2875 9583 ...
## $ LoanKey : Factor w/ 113066 levels "00003683605746079487FF7",..: 100337 69837 46303 70776 71387 86505 91250 5425 908 908 ...
## $ TotalProsperLoans : int NA NA NA NA 1 NA NA NA NA NA ...
## $ TotalProsperPaymentsBilled : int NA NA NA NA 11 NA NA NA NA NA ...
## $ OnTimeProsperPayments : int NA NA NA NA 11 NA NA NA NA NA ...
## $ ProsperPaymentsLessThanOneMonthLate: int NA NA NA NA 0 NA NA NA NA NA ...
## $ ProsperPaymentsOneMonthPlusLate : int NA NA NA NA 0 NA NA NA NA NA ...
## $ ProsperPrincipalBorrowed : num NA NA NA NA 11000 NA NA NA NA NA ...
## $ ProsperPrincipalOutstanding : num NA NA NA NA 9948 ...
## $ ScorexChangeAtTimeOfListing : int NA NA NA NA NA NA NA NA NA NA ...
## $ LoanCurrentDaysDelinquent : int 0 0 0 0 0 0 0 0 0 0 ...
## $ LoanFirstDefaultedCycleNumber : int NA NA NA NA NA NA NA NA NA NA ...
## $ LoanMonthsSinceOrigination : int 78 0 86 16 6 3 11 10 3 3 ...
## $ LoanNumber : int 19141 134815 6466 77296 102670 123257 88353 90051 121268 121268 ...
## $ LoanOriginalAmount : int 9425 10000 3001 10000 15000 15000 3000 10000 10000 10000 ...
## $ LoanOriginationDate : Factor w/ 1873 levels "2005-11-15 00:00:00",..: 426 1866 260 1535 1757 1821 1649 1666 1813 1813 ...
## $ LoanOriginationQuarter : Factor w/ 33 levels "Q1 2006","Q1 2007",..: 18 8 2 32 24 33 16 16 33 33 ...
## $ MemberKey : Factor w/ 90831 levels "00003397697413387CAF966",..: 11071 10302 33781 54939 19465 48037 60448 40951 26129 26129 ...
## $ MonthlyLoanPayment : num 330 319 123 321 564 ...
## $ LP_CustomerPayments : num 11396 0 4187 5143 2820 ...
## $ LP_CustomerPrincipalPayments : num 9425 0 3001 4091 1563 ...
## $ LP_InterestandFees : num 1971 0 1186 1052 1257 ...
## $ LP_ServiceFees : num -133.2 0 -24.2 -108 -60.3 ...
## $ LP_CollectionFees : num 0 0 0 0 0 0 0 0 0 0 ...
## $ LP_GrossPrincipalLoss : num 0 0 0 0 0 0 0 0 0 0 ...
## $ LP_NetPrincipalLoss : num 0 0 0 0 0 0 0 0 0 0 ...
## $ LP_NonPrincipalRecoverypayments : num 0 0 0 0 0 0 0 0 0 0 ...
## $ PercentFunded : num 1 1 1 1 1 1 1 1 1 1 ...
## $ Recommendations : int 0 0 0 0 0 0 0 0 0 0 ...
## $ InvestmentFromFriendsCount : int 0 0 0 0 0 0 0 0 0 0 ...
## $ InvestmentFromFriendsAmount : num 0 0 0 0 0 0 0 0 0 0 ...
## $ Investors : int 258 1 41 158 20 1 1 1 1 1 ...Summary Stastics of Data
| ListingKey | ListingNumber | ListingCreationDate |
|---|---|---|
| 17A93590655669644DB4C06: 6 | Min. : 4 | 2013-10-02 17:20:16.550000000: 6 |
| 349D3587495831350F0F648: 4 | 1st Qu.: 400919 | 2013-08-28 20:31:41.107000000: 4 |
| 47C1359638497431975670B: 4 | Median : 600554 | 2013-09-08 09:27:44.853000000: 4 |
| 8474358854651984137201C: 4 | Mean : 627886 | 2013-12-06 05:43:13.830000000: 4 |
| DE8535960513435199406CE: 4 | 3rd Qu.: 892634 | 2013-12-06 11:44:58.283000000: 4 |
| 04C13599434217079754AEE: 3 | Max. :1255725 | 2013-08-21 07:25:22.360000000: 3 |
| (Other) :113912 | NA | (Other) :113912 |
| CreditGrade | Term | LoanStatus | ClosedDate |
|---|---|---|---|
| C : 5649 | Min. :12.00 | Current :56576 | 2014-03-04 00:00:00: 105 |
| D : 5153 | 1st Qu.:36.00 | Completed :38074 | 2014-02-19 00:00:00: 100 |
| B : 4389 | Median :36.00 | Chargedoff :11992 | 2014-02-11 00:00:00: 92 |
| AA : 3509 | Mean :40.83 | Defaulted : 5018 | 2012-10-30 00:00:00: 81 |
| HR : 3508 | 3rd Qu.:36.00 | Past Due (1-15 days) : 806 | 2013-02-26 00:00:00: 78 |
| (Other): 6745 | Max. :60.00 | Past Due (31-60 days): 363 | (Other) :54633 |
| NA’s :84984 | NA | (Other) : 1108 | NA’s :58848 |
| BorrowerAPR | BorrowerRate | LenderYield | EstimatedEffectiveYield |
|---|---|---|---|
| Min. :0.00653 | Min. :0.0000 | Min. :-0.0100 | Min. :-0.183 |
| 1st Qu.:0.15629 | 1st Qu.:0.1340 | 1st Qu.: 0.1242 | 1st Qu.: 0.116 |
| Median :0.20976 | Median :0.1840 | Median : 0.1730 | Median : 0.162 |
| Mean :0.21883 | Mean :0.1928 | Mean : 0.1827 | Mean : 0.169 |
| 3rd Qu.:0.28381 | 3rd Qu.:0.2500 | 3rd Qu.: 0.2400 | 3rd Qu.: 0.224 |
| Max. :0.51229 | Max. :0.4975 | Max. : 0.4925 | Max. : 0.320 |
| NA’s :25 | NA | NA | NA’s :29084 |
| EstimatedLoss | EstimatedReturn | ProsperRating.numeric | ProsperRating.Alpha |
|---|---|---|---|
| Min. :0.005 | Min. :-0.183 | Min. :1.000 | C :18345 |
| 1st Qu.:0.042 | 1st Qu.: 0.074 | 1st Qu.:3.000 | B :15581 |
| Median :0.072 | Median : 0.092 | Median :4.000 | A :14551 |
| Mean :0.080 | Mean : 0.096 | Mean :4.072 | D :14274 |
| 3rd Qu.:0.112 | 3rd Qu.: 0.117 | 3rd Qu.:5.000 | E : 9795 |
| Max. :0.366 | Max. : 0.284 | Max. :7.000 | (Other):12307 |
| NA’s :29084 | NA’s :29084 | NA’s :29084 | NA’s :29084 |
| ProsperScore | ListingCategory.numeric | BorrowerState |
|---|---|---|
| Min. : 1.00 | Min. : 0.000 | CA :14717 |
| 1st Qu.: 4.00 | 1st Qu.: 1.000 | TX : 6842 |
| Median : 6.00 | Median : 1.000 | NY : 6729 |
| Mean : 5.95 | Mean : 2.774 | FL : 6720 |
| 3rd Qu.: 8.00 | 3rd Qu.: 3.000 | IL : 5921 |
| Max. :11.00 | Max. :20.000 | (Other):67493 |
| NA’s :29084 | NA | NA’s : 5515 |
| Occupation | EmploymentStatus | EmploymentStatusDuration |
|---|---|---|
| Other :28617 | Employed :67322 | Min. : 0.00 |
| Professional :13628 | Full-time :26355 | 1st Qu.: 26.00 |
| Computer Programmer: 4478 | Self-employed: 6134 | Median : 67.00 |
| Executive : 4311 | Not available: 5347 | Mean : 96.07 |
| Teacher : 3759 | Other : 3806 | 3rd Qu.:137.00 |
| (Other) :55556 | (Other) : 2718 | Max. :755.00 |
| NA’s : 3588 | NA’s : 2255 | NA’s :7625 |
| IsBorrowerHomeowner | CurrentlyInGroup | GroupKey |
|---|---|---|
| False:56459 | False:101218 | 783C3371218786870A73D20: 1140 |
| True :57478 | True : 12719 | 3D4D3366260257624AB272D: 916 |
| NA | NA | 6A3B336601725506917317E: 698 |
| NA | NA | FEF83377364176536637E50: 611 |
| NA | NA | C9643379247860156A00EC0: 342 |
| NA | NA | (Other) : 9634 |
| NA | NA | NA’s :100596 |
| DateCreditPulled | CreditScoreRangeLower | CreditScoreRangeUpper |
|---|---|---|
| 2013-12-23 09:38:12: 6 | Min. : 0.0 | Min. : 19.0 |
| 2013-11-21 09:09:41: 4 | 1st Qu.:660.0 | 1st Qu.:679.0 |
| 2013-12-06 05:43:16: 4 | Median :680.0 | Median :699.0 |
| 2014-01-14 20:17:49: 4 | Mean :685.6 | Mean :704.6 |
| 2014-02-09 12:14:41: 4 | 3rd Qu.:720.0 | 3rd Qu.:739.0 |
| 2013-09-27 22:04:54: 3 | Max. :880.0 | Max. :899.0 |
| (Other) :113912 | NA’s :591 | NA’s :591 |
| FirstRecordedCreditLine | CurrentCreditLines | OpenCreditLines |
|---|---|---|
| 1993-12-01 00:00:00: 185 | Min. : 0.00 | Min. : 0.00 |
| 1994-11-01 00:00:00: 178 | 1st Qu.: 7.00 | 1st Qu.: 6.00 |
| 1995-11-01 00:00:00: 168 | Median :10.00 | Median : 9.00 |
| 1990-04-01 00:00:00: 161 | Mean :10.32 | Mean : 9.26 |
| 1995-03-01 00:00:00: 159 | 3rd Qu.:13.00 | 3rd Qu.:12.00 |
| (Other) :112389 | Max. :59.00 | Max. :54.00 |
| NA’s : 697 | NA’s :7604 | NA’s :7604 |
| TotalCreditLinespast7years | OpenRevolvingAccounts |
|---|---|
| Min. : 2.00 | Min. : 0.00 |
| 1st Qu.: 17.00 | 1st Qu.: 4.00 |
| Median : 25.00 | Median : 6.00 |
| Mean : 26.75 | Mean : 6.97 |
| 3rd Qu.: 35.00 | 3rd Qu.: 9.00 |
| Max. :136.00 | Max. :51.00 |
| NA’s :697 | NA |
| OpenRevolvingMonthlyPayment | InquiriesLast6Months | TotalInquiries |
|---|---|---|
| Min. : 0.0 | Min. : 0.000 | Min. : 0.000 |
| 1st Qu.: 114.0 | 1st Qu.: 0.000 | 1st Qu.: 2.000 |
| Median : 271.0 | Median : 1.000 | Median : 4.000 |
| Mean : 398.3 | Mean : 1.435 | Mean : 5.584 |
| 3rd Qu.: 525.0 | 3rd Qu.: 2.000 | 3rd Qu.: 7.000 |
| Max. :14985.0 | Max. :105.000 | Max. :379.000 |
| NA | NA’s :697 | NA’s :1159 |
| CurrentDelinquencies | AmountDelinquent | DelinquenciesLast7Years |
|---|---|---|
| Min. : 0.0000 | Min. : 0.0 | Min. : 0.000 |
| 1st Qu.: 0.0000 | 1st Qu.: 0.0 | 1st Qu.: 0.000 |
| Median : 0.0000 | Median : 0.0 | Median : 0.000 |
| Mean : 0.5921 | Mean : 984.5 | Mean : 4.155 |
| 3rd Qu.: 0.0000 | 3rd Qu.: 0.0 | 3rd Qu.: 3.000 |
| Max. :83.0000 | Max. :463881.0 | Max. :99.000 |
| NA’s :697 | NA’s :7622 | NA’s :990 |
| PublicRecordsLast10Years | PublicRecordsLast12Months | RevolvingCreditBalance |
|---|---|---|
| Min. : 0.0000 | Min. : 0.000 | Min. : 0 |
| 1st Qu.: 0.0000 | 1st Qu.: 0.000 | 1st Qu.: 3121 |
| Median : 0.0000 | Median : 0.000 | Median : 8549 |
| Mean : 0.3126 | Mean : 0.015 | Mean : 17599 |
| 3rd Qu.: 0.0000 | 3rd Qu.: 0.000 | 3rd Qu.: 19521 |
| Max. :38.0000 | Max. :20.000 | Max. :1435667 |
| NA’s :697 | NA’s :7604 | NA’s :7604 |
| BankcardUtilization | AvailableBankcardCredit | TotalTrades |
|---|---|---|
| Min. :0.000 | Min. : 0 | Min. : 0.00 |
| 1st Qu.:0.310 | 1st Qu.: 880 | 1st Qu.: 15.00 |
| Median :0.600 | Median : 4100 | Median : 22.00 |
| Mean :0.561 | Mean : 11210 | Mean : 23.23 |
| 3rd Qu.:0.840 | 3rd Qu.: 13180 | 3rd Qu.: 30.00 |
| Max. :5.950 | Max. :646285 | Max. :126.00 |
| NA’s :7604 | NA’s :7544 | NA’s :7544 |
| TradesNeverDelinquent.percentage | TradesOpenedLast6Months | DebtToIncomeRatio |
|---|---|---|
| Min. :0.000 | Min. : 0.000 | Min. : 0.000 |
| 1st Qu.:0.820 | 1st Qu.: 0.000 | 1st Qu.: 0.140 |
| Median :0.940 | Median : 0.000 | Median : 0.220 |
| Mean :0.886 | Mean : 0.802 | Mean : 0.276 |
| 3rd Qu.:1.000 | 3rd Qu.: 1.000 | 3rd Qu.: 0.320 |
| Max. :1.000 | Max. :20.000 | Max. :10.010 |
| NA’s :7544 | NA’s :7544 | NA’s :8554 |
| IncomeRange | IncomeVerifiable | StatedMonthlyIncome |
|---|---|---|
| $25,000-49,999:32192 | False: 8669 | Min. : 0 |
| $50,000-74,999:31050 | True :105268 | 1st Qu.: 3200 |
| $100,000+ :17337 | NA | Median : 4667 |
| $75,000-99,999:16916 | NA | Mean : 5608 |
| Not displayed : 7741 | NA | 3rd Qu.: 6825 |
| $1-24,999 : 7274 | NA | Max. :1750003 |
| (Other) : 1427 | NA | NA |
| LoanKey | TotalProsperLoans | TotalProsperPaymentsBilled |
|---|---|---|
| CB1B37030986463208432A1: 6 | Min. :0.00 | Min. : 0.00 |
| 2DEE3698211017519D7333F: 4 | 1st Qu.:1.00 | 1st Qu.: 9.00 |
| 9F4B37043517554537C364C: 4 | Median :1.00 | Median : 16.00 |
| D895370150591392337ED6D: 4 | Mean :1.42 | Mean : 22.93 |
| E6FB37073953690388BC56D: 4 | 3rd Qu.:2.00 | 3rd Qu.: 33.00 |
| 0D8F37036734373301ED419: 3 | Max. :8.00 | Max. :141.00 |
| (Other) :113912 | NA’s :91852 | NA’s :91852 |
| OnTimeProsperPayments | ProsperPaymentsLessThanOneMonthLate |
|---|---|
| Min. : 0.00 | Min. : 0.00 |
| 1st Qu.: 9.00 | 1st Qu.: 0.00 |
| Median : 15.00 | Median : 0.00 |
| Mean : 22.27 | Mean : 0.61 |
| 3rd Qu.: 32.00 | 3rd Qu.: 0.00 |
| Max. :141.00 | Max. :42.00 |
| NA’s :91852 | NA’s :91852 |
| ProsperPaymentsOneMonthPlusLate | ProsperPrincipalBorrowed |
|---|---|
| Min. : 0.00 | Min. : 0 |
| 1st Qu.: 0.00 | 1st Qu.: 3500 |
| Median : 0.00 | Median : 6000 |
| Mean : 0.05 | Mean : 8472 |
| 3rd Qu.: 0.00 | 3rd Qu.:11000 |
| Max. :21.00 | Max. :72499 |
| NA’s :91852 | NA’s :91852 |
| ProsperPrincipalOutstanding | ScorexChangeAtTimeOfListing |
|---|---|
| Min. : 0 | Min. :-209.00 |
| 1st Qu.: 0 | 1st Qu.: -35.00 |
| Median : 1627 | Median : -3.00 |
| Mean : 2930 | Mean : -3.22 |
| 3rd Qu.: 4127 | 3rd Qu.: 25.00 |
| Max. :23451 | Max. : 286.00 |
| NA’s :91852 | NA’s :95009 |
| LoanCurrentDaysDelinquent | LoanFirstDefaultedCycleNumber |
|---|---|
| Min. : 0.0 | Min. : 0.00 |
| 1st Qu.: 0.0 | 1st Qu.: 9.00 |
| Median : 0.0 | Median :14.00 |
| Mean : 152.8 | Mean :16.27 |
| 3rd Qu.: 0.0 | 3rd Qu.:22.00 |
| Max. :2704.0 | Max. :44.00 |
| NA | NA’s :96985 |
| LoanMonthsSinceOrigination | LoanNumber | LoanOriginalAmount |
|---|---|---|
| Min. : 0.0 | Min. : 1 | Min. : 1000 |
| 1st Qu.: 6.0 | 1st Qu.: 37332 | 1st Qu.: 4000 |
| Median : 21.0 | Median : 68599 | Median : 6500 |
| Mean : 31.9 | Mean : 69444 | Mean : 8337 |
| 3rd Qu.: 65.0 | 3rd Qu.:101901 | 3rd Qu.:12000 |
| Max. :100.0 | Max. :136486 | Max. :35000 |
| NA | NA | NA |
| LoanOriginationDate | LoanOriginationQuarter | MemberKey |
|---|---|---|
| 2014-01-22 00:00:00: 491 | Q4 2013:14450 | 63CA34120866140639431C9: 9 |
| 2013-11-13 00:00:00: 490 | Q1 2014:12172 | 16083364744933457E57FB9: 8 |
| 2014-02-19 00:00:00: 439 | Q3 2013: 9180 | 3A2F3380477699707C81385: 8 |
| 2013-10-16 00:00:00: 434 | Q2 2013: 7099 | 4D9C3403302047712AD0CDD: 8 |
| 2014-01-28 00:00:00: 339 | Q3 2012: 5632 | 739C338135235294782AE75: 8 |
| 2013-09-24 00:00:00: 316 | Q2 2012: 5061 | 7E1733653050264822FAA3D: 8 |
| (Other) :111428 | (Other):60343 | (Other) :113888 |
| MonthlyLoanPayment | LP_CustomerPayments | LP_CustomerPrincipalPayments |
|---|---|---|
| Min. : 0.0 | Min. : -2.35 | Min. : 0.0 |
| 1st Qu.: 131.6 | 1st Qu.: 1005.76 | 1st Qu.: 500.9 |
| Median : 217.7 | Median : 2583.83 | Median : 1587.5 |
| Mean : 272.5 | Mean : 4183.08 | Mean : 3105.5 |
| 3rd Qu.: 371.6 | 3rd Qu.: 5548.40 | 3rd Qu.: 4000.0 |
| Max. :2251.5 | Max. :40702.39 | Max. :35000.0 |
| NA | NA | NA |
| LP_InterestandFees | LP_ServiceFees | LP_CollectionFees |
|---|---|---|
| Min. : -2.35 | Min. :-664.87 | Min. :-9274.75 |
| 1st Qu.: 274.87 | 1st Qu.: -73.18 | 1st Qu.: 0.00 |
| Median : 700.84 | Median : -34.44 | Median : 0.00 |
| Mean : 1077.54 | Mean : -54.73 | Mean : -14.24 |
| 3rd Qu.: 1458.54 | 3rd Qu.: -13.92 | 3rd Qu.: 0.00 |
| Max. :15617.03 | Max. : 32.06 | Max. : 0.00 |
| NA | NA | NA |
| LP_GrossPrincipalLoss | LP_NetPrincipalLoss | LP_NonPrincipalRecoverypayments |
|---|---|---|
| Min. : -94.2 | Min. : -954.5 | Min. : 0.00 |
| 1st Qu.: 0.0 | 1st Qu.: 0.0 | 1st Qu.: 0.00 |
| Median : 0.0 | Median : 0.0 | Median : 0.00 |
| Mean : 700.4 | Mean : 681.4 | Mean : 25.14 |
| 3rd Qu.: 0.0 | 3rd Qu.: 0.0 | 3rd Qu.: 0.00 |
| Max. :25000.0 | Max. :25000.0 | Max. :21117.90 |
| NA | NA | NA |
| PercentFunded | Recommendations | InvestmentFromFriendsCount |
|---|---|---|
| Min. :0.7000 | Min. : 0.00000 | Min. : 0.00000 |
| 1st Qu.:1.0000 | 1st Qu.: 0.00000 | 1st Qu.: 0.00000 |
| Median :1.0000 | Median : 0.00000 | Median : 0.00000 |
| Mean :0.9986 | Mean : 0.04803 | Mean : 0.02346 |
| 3rd Qu.:1.0000 | 3rd Qu.: 0.00000 | 3rd Qu.: 0.00000 |
| Max. :1.0125 | Max. :39.00000 | Max. :33.00000 |
| NA | NA | NA |
| InvestmentFromFriendsAmount | Investors |
|---|---|
| Min. : 0.00 | Min. : 1.00 |
| 1st Qu.: 0.00 | 1st Qu.: 2.00 |
| Median : 0.00 | Median : 44.00 |
| Mean : 16.55 | Mean : 80.48 |
| 3rd Qu.: 0.00 | 3rd Qu.: 115.00 |
| Max. :25000.00 | Max. :1189.00 |
| NA | NA |
Credit Grades before 2009 are missing for many loans but for those that do exist a C credit rating is most prevalent. I wonder why C credit grades borrowers are granted the most loans.
Lower Credit Scores are mostly between 360 and 880. Some people have 0 for their lower credit score since if you have a credit score lower than 350 it is automatically set to zero. If you remove these 0 credit scores you are able to see wierd areas around credit score 600-620 and 780-800 that do not have any scores. I do not understand these empty spaces but overall the distribution is normal.
There are a few outlier upper credit scores of 19 but if these are removed the overall plot is normal with small holes around around credit score 600-620 and 780-800 just like in the lower credit scores.
36 months is the most prevalent loan term length. I wonder why a 36 month loan is most prevalent.
While there are many defualted or chargedoff loans, most loans are current or compeleted.
Estimated Returns seems to have normal distribution centered around .1 with some outliers that go into the negative returns.
## Min. 1st Qu. Median Mean 3rd Qu. Max. NA's
## -0.183 0.074 0.092 0.096 0.117 0.284 29084Most borrowers for prosper loans reside in California. It seems that the states with the largest cities seem the have the largest density of borrowers.
Most borrowers have a debt to income around .22 but the distribution is positively skewed with many large outliers. For example, some have a D2I ratio of 10.01:1. I wonder which type of borrower takes on such a large debt to income ratio?
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 0.0000 0.1400 0.2200 0.2759 0.3200 10.0100Most prosper borrowers have an income in the range of $25,000-$49,999.
Most prosper borrowers are making around $4000 a month which falls right in line with a yearly income of about $48,000. At the same time one borrower had a stated monthly income of $1,750,000. Could this outlier be an error since this person would potentially be making over $21,000,000 a year need a loan for $4000?
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 0 3200 4667 5608 6825 1750000## LoanOriginalAmount
## 1 4000There seems to be spikes in specific loan amounts which may stem from the way prosper creates loans. Also the distribution for prosper loans seems to be positively skewed with a media nof $6500 and a maximum of $35000.
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 1000 4000 6500 8337 12000 35000Closed Dates do not seem to have any outliers but it has a large dip in the amount of closed loans in 2012. I wonder why that is.
## Min. 1st Qu. Median Mean 3rd Qu.
## "2005-11-25" "2009-07-14" "2011-04-05" "2011-03-07" "2013-01-30"
## Max.
## "2014-03-10"Borrower APR does not have many outliers with a median APR of .2098. The distribution seems to be normal with limited spikes at .3 and .38.
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 0.00653 0.15630 0.20980 0.21880 0.28380 0.51230Most borrowers are listed under debt consolidation.
##
## 0 1 2 3 4 5 6 7 8 9 10 11
## 16965 58308 7433 7189 2395 756 2572 10494 199 85 91 217
## 12 13 14 15 16 17 18 19 20
## 59 1996 876 1522 304 52 885 768 771Almost all borrowers have no recommendations when they get a loan from prosper loans which is staggering. Even when you remove all those with no recommendations you still have a majority with only 1 recommendation. It seems most people who get loans on prosper loans do not have many people who think highly of them or having recommendations is not very important to lenders.
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 0.00000 0.00000 0.00000 0.04803 0.00000 39.00000##
## 0 1 2 3 4 5 6 7 8 9
## 109678 3516 568 108 26 14 4 5 3 6
## 14 16 18 19 21 24 39
## 1 2 2 1 1 1 1The current credit lines distribution is very smooth with a slight positive skew since there are quiet a few large upper outliers. The median is 10 current credit lines.
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 0.00 7.00 10.00 10.32 13.00 59.00Almost all borrowers are full-time or employed. It seems having a steady job is very important to prove to lenders that you will pay off your loans.
## Employed Full-time Not available Not employed Other
## 67322 26355 5347 835 3806
## Part-time Retired Self-employed
## 1088 795 6134The investment from friends seems to be very positively skewed. The distribation is easier to see if it is placed on a a log scale.
Bivariate Plots
Leading up to the 2008 financial crisis there seemed to be a large increas in defaulted loans. Those loans seemed to convert over to charged off loans after 2008 and these defaulted loans then increased in number up to around 2009 where they slowly decreased in amount as completed loans greatly increased on number. It seems the drastic decrease in completed loans lead to the large overall decrease in number of closed loans in 2012. After this there is an increase in charged of and completed loans up to the present.
Most of the largely correlated items in the correlation matrix are interelated and do not shead large insights into relationships in the data alone.
Those with a monthly income less than about $8334 seem unable to get a loan larger than $25000. I wonder if prosper loans have made a maximum loan amount $25,000 for lower income borrowers?
## StatedMonthlyIncome LoanOriginalAmount
## 1 8333.333 35000
## 2 8333.333 30000
## 3 8333.333 35000
## 4 8333.333 30000
## 5 8333.333 35000
## 6 8333.333 35000
## 7 8333.333 35000
## 8 8333.333 35000
## 9 8333.333 30000
## 10 8333.333 30000
## 11 8333.333 30000
## 12 8333.333 35000
## 13 8333.333 30000
## 14 8333.333 28000
## 15 8333.333 28000
## 16 8333.333 35000
## 17 8333.333 35000
## 18 8333.333 30000
## 19 8333.333 30000
## 20 8333.333 30000
## 21 8333.333 35000
## 22 8333.333 34700
## 23 8333.333 35000
## 24 8333.333 32500
## 25 8333.333 35000
## 26 8333.333 35000
## 27 8333.333 35000
## 28 8333.333 32500
## 29 8333.333 30000
## 30 8333.333 35000
## 31 8333.333 30000
## 32 8333.333 30000
## 33 8333.333 28000
## 34 8333.333 35000
## 35 8333.333 28500
## 36 8333.333 35000
## 37 8333.333 30000
## 38 8333.333 30000If you look at how much money is estimated to be made on average from a loan, borrowers with a C ratings tend to give the largest returns.
## $AA
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 14.6 288.8 579.1 639.2 853.5 2831.0
##
## $A
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 25.52 382.20 708.00 807.60 1090.00 3055.00
##
## $B
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## -8.0 516.6 894.9 998.8 1358.0 3570.0
##
## $C
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## -60.0 509.8 927.4 1007.0 1339.0 4118.0
##
## $D
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## -5.168 420.400 756.300 832.900 1146.000 3096.000
##
## $E
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## -21.42 404.10 480.90 567.60 704.40 2930.00
##
## $HR
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## -1656.0 311.5 453.9 395.0 498.4 2029.0
##
## $NC
## NULLIt seems the highest estimated return in-terms of percent increases as loans get higher risk with worst borrower credit rating, which makes sense since APR increases aswell. This can be seen with a F value of 13792 with an extremely low p value between all pairs from an analysis of variance POST HOC test.
## $AA
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 0.01460 0.04554 0.05100 0.05399 0.05540 0.19360
##
## $A
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 0.01780 0.06081 0.06663 0.06965 0.07284 0.18310
##
## $B
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## -0.00100 0.07408 0.08215 0.08629 0.09260 0.28370
##
## $C
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## -0.00910 0.08227 0.09220 0.09810 0.11050 0.26670
##
## $D
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## -0.0045 0.1012 0.1163 0.1187 0.1414 0.2332
##
## $E
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## -0.0124 0.1054 0.1239 0.1247 0.1487 0.1843
##
## $HR
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## -0.1827 0.1135 0.1221 0.1136 0.1246 0.1399
##
## $NC
## NULL## Df Sum Sq Mean Sq F value Pr(>F)
## AllCreditGrades 6 38.73 6.454 13792 <2e-16 ***
## Residuals 84846 39.71 0.000
## ---
## Signif. codes: 0 '***' 0.001 '**' 0.01 '*' 0.05 '.' 0.1 ' ' 1
## 29084 observations deleted due to missingness## Tukey multiple comparisons of means
## 95% family-wise confidence level
##
## Fit: aov(formula = EstimatedReturn ~ AllCreditGrades, data = Loans)
##
## $AllCreditGrades
## diff lwr upr p adj
## A-AA 0.015656356 0.014638105 0.016674606 0
## B-AA 0.032301445 0.031292310 0.033310580 0
## C-AA 0.044112993 0.043123541 0.045102445 0
## D-AA 0.064737053 0.063716141 0.065757964 0
## E-AA 0.070700639 0.069617781 0.071783496 0
## HR-AA 0.059635718 0.058476470 0.060794967 0
## B-A 0.016645089 0.015909794 0.017380385 0
## C-A 0.028456637 0.027748597 0.029164678 0
## D-A 0.049080697 0.048329321 0.049832073 0
## E-A 0.055044283 0.054210684 0.055877882 0
## HR-A 0.043979363 0.043048684 0.044910042 0
## C-B 0.011811548 0.011116681 0.012506415 0
## D-B 0.032435608 0.031696633 0.033174583 0
## E-B 0.038399194 0.037576755 0.039221632 0
## HR-B 0.027334273 0.026413577 0.028254970 0
## D-C 0.020624060 0.019912198 0.021335921 0
## E-C 0.026587646 0.025789480 0.027385811 0
## HR-C 0.015522725 0.014623645 0.016421805 0
## E-D 0.005963586 0.005126739 0.006800432 0
## HR-D -0.005101334 -0.006034924 -0.004167745 0
## HR-E -0.011064920 -0.012065875 -0.010063966 0Of loans that are completed and not charged off or defaulted, the most return on average actually comes from D CreditGrade grade loans with a mean value of $1293.00.
## $AA
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## -7221.0 137.3 429.3 871.6 1103.0 13230.0
##
## $A
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## -8444.0 255.9 640.0 1030.0 1338.0 15700.0
##
## $B
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## -13570.0 390.0 914.7 1312.0 1794.0 10690.0
##
## $C
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## -3000.0 362.9 844.2 1218.0 1606.0 11810.0
##
## $D
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## -8819.0 467.7 974.4 1293.0 1777.0 13010.0
##
## $E
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## -2904.0 411.6 829.3 1108.0 1522.0 10800.0
##
## $HR
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## -512.5 387.5 729.5 921.1 1270.0 9164.0
##
## $NC
## NULLSeems Chargedoff loans truly began during the 2008 recession.
Seems that people who chargeoff or defualt on their loans have about the same median amount of current credit lines as those who complete their loans.
## $Cancelled
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 9 9 9 9 9 9
##
## $Chargedoff
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 0.000 5.000 8.000 8.846 12.000 48.000
##
## $Completed
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 0.000 6.000 9.000 9.692 13.000 59.000
##
## $Current
## NULL
##
## $Defaulted
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 0.00 6.00 10.00 10.64 14.00 52.00
##
## $FinalPaymentInProgress
## NULL
##
## $`Past Due (>120 days)`
## NULL
##
## $`Past Due (1-15 days)`
## NULL
##
## $`Past Due (16-30 days)`
## NULL
##
## $`Past Due (31-60 days)`
## NULL
##
## $`Past Due (61-90 days)`
## NULL
##
## $`Past Due (91-120 days)`
## NULLAs you credit grade gets better your APR gets lower. This relationship is not do to randomn variance based since these two varaibles have a F value of 55574 and extremely low p values for all pairs in a POST HOC test. Another important oberservation is that even with a specific credit grade there are a wide range of APR possible. Even with an HR credit grade an borrower can get an loan APR around 0.00864.
## $AA
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 0.01650 0.08325 0.09136 0.09641 0.10140 0.33170
##
## $A
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 0.01315 0.12450 0.13710 0.13830 0.15040 0.36620
##
## $B
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 0.01325 0.16650 0.17750 0.17970 0.19500 0.37630
##
## $C
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 0.00653 0.20040 0.22110 0.21840 0.24200 0.40240
##
## $D
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 0.00653 0.24610 0.27470 0.26600 0.29510 0.41360
##
## $E
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 0.01657 0.30130 0.32440 0.31550 0.34620 0.41360
##
## $HR
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 0.00864 0.30550 0.35640 0.32760 0.35800 0.51230
##
## $NC
## NULL## Df Sum Sq Mean Sq F value Pr(>F)
## AllCreditGrades 7 568.3 81.18 55574 <2e-16 ***
## Residuals 113773 166.2 0.00
## ---
## Signif. codes: 0 '***' 0.001 '**' 0.01 '*' 0.05 '.' 0.1 ' ' 1
## 156 observations deleted due to missingness## Tukey multiple comparisons of means
## 95% family-wise confidence level
##
## Fit: aov(formula = BorrowerAPR ~ AllCreditGrades, data = Loans)
##
## $AllCreditGrades
## diff lwr upr p adj
## A-AA 0.04190859 0.040403734 0.04341344 0.0e+00
## B-AA 0.08329820 0.081819862 0.08477653 0.0e+00
## C-AA 0.12203080 0.120591084 0.12347051 0.0e+00
## D-AA 0.16957414 0.168089480 0.17105881 0.0e+00
## E-AA 0.21910684 0.217513370 0.22070031 0.0e+00
## HR-AA 0.23118069 0.229507762 0.23285362 0.0e+00
## NC-AA 0.13860918 0.128741704 0.14847666 0.0e+00
## B-A 0.04138961 0.040196623 0.04258259 0.0e+00
## C-A 0.08012221 0.078977432 0.08126699 0.0e+00
## D-A 0.12766556 0.126464737 0.12886637 0.0e+00
## E-A 0.17719825 0.175865254 0.17853125 0.0e+00
## HR-A 0.18927210 0.187845067 0.19069914 0.0e+00
## NC-A 0.09670060 0.086871817 0.10652937 0.0e+00
## C-B 0.03873260 0.037622914 0.03984229 0.0e+00
## D-B 0.08627595 0.085108533 0.08744336 0.0e+00
## E-B 0.13580864 0.134505657 0.13711163 0.0e+00
## HR-B 0.14788249 0.146483451 0.14928154 0.0e+00
## NC-B 0.05531099 0.045486234 0.06513574 0.0e+00
## D-C 0.04754334 0.046425239 0.04866145 0.0e+00
## E-C 0.09707604 0.095817042 0.09833504 0.0e+00
## HR-C 0.10914989 0.107791722 0.11050806 0.0e+00
## NC-C 0.01657838 0.006759368 0.02639740 8.6e-06
## E-D 0.04953270 0.048222535 0.05084286 0.0e+00
## HR-D 0.06160655 0.060200820 0.06301228 0.0e+00
## NC-D -0.03096496 -0.040790667 -0.02113925 0.0e+00
## HR-E 0.01207385 0.010553657 0.01359405 0.0e+00
## NC-E -0.08049766 -0.090340392 -0.07065492 0.0e+00
## NC-HR -0.09257151 -0.102427420 -0.08271560 0.0e+00I found the median APR for all credit grades except AA increased after 2009.
| CreditGrade | median_before_2009 | mean_before_2009 | n.x | median_after_2009 | mean_after_2009 | n.y |
|---|---|---|---|---|---|---|
| A | 0.125520 | 0.1356993 | 3314 | 0.13799 | 0.1389094 | 14551 |
| AA | 0.096880 | 0.1061880 | 3495 | 0.09000 | 0.0900407 | 5372 |
| B | 0.156020 | 0.1643373 | 4387 | 0.18173 | 0.1840300 | 15581 |
| C | 0.180440 | 0.1934553 | 5646 | 0.22362 | 0.2261244 | 18345 |
| D | 0.213975 | 0.2255261 | 5152 | 0.28488 | 0.2805805 | 14274 |
| E | 0.269135 | 0.2707125 | 3288 | 0.33215 | 0.3305506 | 9795 |
| HR | 0.281790 | 0.2712610 | 3506 | 0.35797 | 0.3560612 | 6935 |
| NA | 0.219450 | 0.2265969 | 84984 | 0.18224 | 0.1959623 | 29059 |
If you look closer at the HR loans estimated return, they may have negative estimated returns in 2009 and 2010 but in normal economic times they are ussually the highest estimated return.
## $`2009`
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## -0.18270 0.00500 0.10200 0.06753 0.13990 0.13990
##
## $`2010`
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## -0.17730 0.06355 0.12220 0.08788 0.13690 0.13990
##
## $`2011`
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 0.0887 0.1087 0.1148 0.1140 0.1246 0.1267
##
## $`2012`
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 0.1124 0.1221 0.1246 0.1228 0.1246 0.1271
##
## $`2013`
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 0.1043 0.1131 0.1135 0.1145 0.1185 0.1185
##
## $`2014`
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 0.09975 0.10430 0.10430 0.10490 0.10660 0.10660Charged Off and Defualted loans tended to have a higher return estimate. Sadly, these loans most likely will not get paid off.
## $Cancelled
## NULL
##
## $Chargedoff
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## -0.1816 0.1108 0.1246 0.1234 0.1440 0.2837
##
## $Completed
## Min. 1st Qu. Median Mean 3rd Qu. Max. NA's
## -0.183 0.072 0.107 0.102 0.132 0.267 18410
##
## $Current
## NULL
##
## $Defaulted
## Min. 1st Qu. Median Mean 3rd Qu. Max. NA's
## -0.046 0.109 0.127 0.123 0.144 0.254 4013
##
## $FinalPaymentInProgress
## NULL
##
## $`Past Due (>120 days)`
## NULL
##
## $`Past Due (1-15 days)`
## NULL
##
## $`Past Due (16-30 days)`
## NULL
##
## $`Past Due (31-60 days)`
## NULL
##
## $`Past Due (61-90 days)`
## NULL
##
## $`Past Due (91-120 days)`
## NULLSeems Prosper facilitates mostly debt consolidation loans to c credti grades.
The C credit grades seems to be the most prevalent in most states.
Is seems that higher educated borrowers with higher paying jobs tend to have higher Credit Grades but still alot of high paying jobs still have bad credit ratings.
Most borrowers are granted a loan if they are employed or full-time employeed.
It would seem higher the borrower’s credit grade, the larger thier loan amount usually. On the other hand, the difference between NC and HR loan amount means seems to not to be significant based upon a post hoc variance test. It is also very interesting that the loan amount average is identical for AA, A and B credit ratings.
## $AA
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 1000 4851 10000 10620 15000 35000
##
## $A
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 1000 5000 10000 11060 15000 35000
##
## $B
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 1000 5000 10000 10900 15000 35000
##
## $C
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 1000 4000 8500 9382 15000 25000
##
## $D
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 1000 3200 5000 6474 10000 25000
##
## $E
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 1000 3000 4000 4286 5000 25000
##
## $HR
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 1000 2000 3200 3124 4000 20000
##
## $NC
## Min. 1st Qu. Median Mean 3rd Qu. Max.
## 1000 1000 2000 2316 3000 10000## Df Sum Sq Mean Sq F value Pr(>F)
## AllCreditGrades 7 9.064e+11 1.295e+11 4169 <2e-16 ***
## Residuals 113798 3.535e+12 3.106e+07
## ---
## Signif. codes: 0 '***' 0.001 '**' 0.01 '*' 0.05 '.' 0.1 ' ' 1
## 131 observations deleted due to missingness## Tukey multiple comparisons of means
## 95% family-wise confidence level
##
## Fit: aov(formula = LoanOriginalAmount ~ AllCreditGrades, data = Loans)
##
## $AllCreditGrades
## diff lwr upr p adj
## A-AA 437.9988 218.68401 657.31367 0.0000000
## B-AA 275.3728 59.92821 490.81733 0.0027090
## C-AA -1238.0426 -1447.85232 -1028.23281 0.0000000
## D-AA -4145.7516 -4362.12101 -3929.38220 0.0000000
## E-AA -6333.5255 -6565.76680 -6101.28419 0.0000000
## HR-AA -7495.6676 -7739.49364 -7251.84166 0.0000000
## NC-AA -8303.2314 -9737.02281 -6869.43995 0.0000000
## B-A -162.6261 -336.57628 11.32415 0.0868471
## C-A -1676.0414 -1842.96190 -1509.12090 0.0000000
## D-A -4583.7504 -4758.84481 -4408.65607 0.0000000
## E-A -6771.5243 -6965.89085 -6577.15782 0.0000000
## HR-A -7933.6665 -8141.73723 -7725.59574 0.0000000
## NC-A -8741.2302 -10169.37593 -7313.08450 0.0000000
## C-B -1513.4153 -1675.21712 -1351.61355 0.0000000
## D-B -4421.1244 -4591.34600 -4250.90275 0.0000000
## E-B -6608.8983 -6798.88697 -6418.90957 0.0000000
## HR-B -7771.0404 -7975.02767 -7567.05317 0.0000000
## NC-B -8578.6041 -10006.16064 -7151.04766 0.0000000
## D-C -2907.7090 -3070.74026 -2744.67782 0.0000000
## E-C -5095.4829 -5279.05712 -4911.90875 0.0000000
## HR-C -6257.6251 -6455.65178 -6059.59839 0.0000000
## NC-C -7065.1888 -8491.90579 -5638.47184 0.0000000
## E-D -2187.7739 -2378.81072 -1996.73707 0.0000000
## HR-D -3349.9160 -3554.87985 -3144.95225 0.0000000
## NC-D -4157.4798 -5585.17614 -2729.78341 0.0000000
## HR-E -1162.1422 -1383.79608 -940.48822 0.0000000
## NC-E -1969.7059 -3399.89370 -539.51806 0.0007845
## NC-HR -807.5637 -2239.67836 624.55089 0.6813763It is interesting that Credit Score for Credit Grade HR has two different spikes around 500 and 660 for the lower Credit Score Range. Credit Grade D also has two peaks around 560 and 660.
Homemakers are the most likely to have a DebtToIncomeRatio of over 10-1. Is this becuase it takes a large amount of capital to build a home before being able to sell it?
Although most people receive no recommendations for a loan, those with a lower DebttoIncome Range have a larger amount of outlier values with high numbers of recommendations.
When a investor loans money to a friend, although counter intuitive, it seems they were more likely to invest more with a friend with a very lower credit grade of HR.
Multivariate Plots
Charge-offs happened from people with a small to large number deliquences in the last 7 years meaning number of delinquencies would not be the best statistic to tell if someone was not going to pay there loans.
There is more very low or negative return outliers for High Risk loans in Auto, Business, Debt Consolidation, and Home Improvement categories. Their is also a very large distribution of Student Use estimated returns.
Seems the higher you credit score the more money lost when you do not repay your loan.
As one looks closer at the Estimated Returns, one finds that borrowers with lower credit grades have the potential to give higher returns in normal prosperous economic times. On the other hand, in bad economic times they also have the potential to yeild significantly lower to negative returns.
It is interesting that if you have over 35 lines of credit your credit score seems to be very volatile.
It makes sense as you get a better credit rating you have less delinquencies and a higher number of CurrentCreditLines.
It is interesting that the amount of money delinquent at its peek is so similar between credit rating A and HR.
It seems the number of recommendations a borrower recieved did not play a large role in the Estimated Return from their loan on average. At the same time it seems HR loans were alot more likely to have negative returns.
Final Plots and Summary
I found the median APR for all credit grades except AA increased after 2009. It was especially interesting that the mean APR for a AA credit grade borrower after 2009 decreased by about 15% while the APR for an HR credit grade borrower increased by over 31%. Could such drastic changes have been caused by the huge credit crisis of the 2009 recession? This chart alone shows me the significance of having a great credit rating!
| CreditGrade | median_before_2009 | mean_before_2009 | n.x | median_after_2009 | mean_after_2009 | n.y |
|---|---|---|---|---|---|---|
| A | 0.125520 | 0.1356993 | 3314 | 0.13799 | 0.1389094 | 14551 |
| AA | 0.096880 | 0.1061880 | 3495 | 0.09000 | 0.0900407 | 5372 |
| B | 0.156020 | 0.1643373 | 4387 | 0.18173 | 0.1840300 | 15581 |
| C | 0.180440 | 0.1934553 | 5646 | 0.22362 | 0.2261244 | 18345 |
| D | 0.213975 | 0.2255261 | 5152 | 0.28488 | 0.2805805 | 14274 |
| E | 0.269135 | 0.2707125 | 3288 | 0.33215 | 0.3305506 | 9795 |
| HR | 0.281790 | 0.2712610 | 3506 | 0.35797 | 0.3560612 | 6935 |
| NA | 0.219450 | 0.2265969 | 84984 | 0.18224 | 0.1959623 | 29059 |
As one looks closer at the Estimated Returns, one finds that borrowers with lower credit grades have the potential to give higher returns in normal prosperous economic times. On the other hand, in bad economic times they also have the potential to yeild significantly lower to negative returns. It is very important for investors to truly understand how difficult it is to get their money back at all if someones loan is chargedoff.
I wanted to better understand the shear magnitude of loses from charge-off loans since I am guessing many investors who use the ebay for loans don’t really understand the huge risks of specific loans. If you add up all losses investors made from charge-off loans you find investors lost $20,313,392 including lining Prospers pockets with $1,159,688. I would make sure to think twice before giving someone a loan who has a HR credit grade especially since Prosper loans still makes millions if you lose your life savings.
| Charge_off_losses | Prosper_Profits |
|---|---|
| 20313392 | 1159688 |
When a investor loans money to a friend, although counter intuitive, it seems they were more likely to invest more with a friend with a very lower credit grade of HR. Could this be since they feel sorry for their friend and loan them money purely since they think no one else would logically lend them money? I would love to be able to ask these people why they are loaning there friend this a HR rating this money.
Reflections
I wished I could have had been given more background on each of the dataset’s variables. I truly tried to calculate how much money people overall made from all the loans but this was very difficult. I wanted to understand in general the overall payout of all loans for investors on Prosper. Sadly this dataset made this extremely difficult since I could not completely figure out how the data was created. For example, listing number 150265 had a Net Principal Loss of $7603.16 on a $20,000 laon but had non-principal recovery payments amounting to $21,117.90. How is this possible?
I would also love to have more data on the investors themselves. How much money do these investors make a year and what background do they have in investing? This could give me a better understanding on whether someone with no investing experience can make money investing on prosper loans or is more likely to lose large quantities of money.
Finally, I wish I had a way to compare prosper loan statistics to a normal banks loan statistics. I would love to understand how the lending practices differed between the two and if these differences changed the overall loan returns on average. Do banks refuse to lend out moeny to specific borrowers while prosper allows such loans since they still make money from facilitating extremely risky loans?